OGH: Liability of an auditor for investor dispositions

Mar 18, 2022 Benn-Ibler Rechtsanwälte

An aggrieved investor has to claim and prove that he made his investment decision in reliance on the auditor's report and that he used it as the basis for his disposition which resulted in damages.

The plaintiff invested EUR 13 million with a stock company (SC) in 2019. The defendant was the auditor of the SC in question between 1999 and 2005. After the plaintiff's investment, insolvency proceedings were opened against the assets of the SC. The plaintiff argued: Although he had received the company's annual accounts together with the unqualified audit opinions, the defendant should have recognised on the basis of his audit that balance sheet misstatements were apparent and should have issued an unfavourable audit opinion on the basis of this. The plaintiff would not have made an investment if he had known this.

The court of first instance dismissed the claim for damages. The plaintiff had not alleged that he had invested on the basis of a reliance on the audit opinions. The Court of Appeal did not uphold the appeal either, but allowed an appeal on the question of the beginning of the statute of limitations according to Section 275 para 5 of the Austrian Commercial Code (Unternehmensgesetzbuch, UGB) in the area of auditor liability.

The Austrian Supreme Court (Oberster Gerichtshof, OGH) decided:

The plaintiff based his claim on the circumstance of a breach of the diligent and impartial audit of an auditor pursuant to Sec. 275 UGB. This claim is generally time-barred within 5 years. This is a lex specialis to the general statute of limitations of Sec. 1489 Austrian General Civil Code (Allgemein Bürgerliches Gesetzbuch, ABGB), which displaces not only the short limitation period but also the long limitation period. In the case of liability under Sec. 275 UGB, the time limit for claims by third parties begins to run with the disposition of assets prompted by the auditor's opinion. The basis of the auditor's liability is the basis of trust created by the audit opinion. If the injured party relies on indirect knowledge of the auditor's report - e.g. through a consultant – when making his disposition, his claim for damages can be based on this. In the case at hand, however, this was not alleged according to the courts' findings, which is why the claim had to be dismissed.

OGH 4 Ob 145/21h (28.09.2021)